U.S. stocks slump on profit-taking sales, led by tech stocks amid falling intere

U.S. stocks slump on profit-taking sales, led by tech stocks amid falling interest rates

The U.S. stock market started lower in early trading, with negative factors flowing in Apple (-2.84%), AMD (-0.11%), and Tesla (-3.93%). Since then, the index's fall has also widened as the decline in technology stocks has widened due to arbitrage sales. Meanwhile, the ISM service index was sluggish in the aftermath of employment and a slowdown in the price index, which widened the decline in government bond rates, but the impact was limited. Rather, sluggish indicators have stimulated concerns about a slowdown in the economy, which puts a burden on investor sentiment. Eventually, the U.S. stock market expanded its fall as profit-taking sales centered on technology stocks were released despite falling interest rates on government bonds. Of course, some of the losses were narrowed just before the market closed as Nvidia (+0.86%) shifted upward, which was falling due to continued concentration (Dow -1.04%), Nasdaq -1.65%, S&P 500 -1.02%, Russell 2000 -0.99%, Philadelphia Semiconductor Index -2.05%)

*Changes: Treasury yields fall, profit-taking is out

The U.S. ISM service industry index for February was 52.6, down from 53.4 or 53.0 announced last month. Production and new orders improved by 1.4p and 1.1p, respectively, but it is estimated that the sharp slowdown in the price index from 64.0 to 58.6 while the employment index slowed from 50.5 to 48.0. After all, while the service industry index also slowed compared to the previous month following the ISM manufacturing index, employment and price index contracted among the detailed items, resulting in a large drop in U.S. government bond rates. Technology stocks fell despite falling interest rates, but the indicators released on the day are believed to have stimulated concerns about a slowdown in the U.S. economy and put a burden on the stock market. Factory orders in January, which were announced together, also slowed down significantly from a 0.3% drop compared to the previous month to a 3.6% drop.

Until now, AI-related stock groups have been strong along with excessive concentration, but recently, related stock groups have been compressed and arbitrage sales have been frequently seen. Eventually, sales are in progress due to a sharp rise. In addition to AI-related stock groups, most of the stock groups, such as other semiconductor industries, cybersecurity, and software, which rose together, are falling, and major indexes are sluggish despite falling interest rates. However, individual investor sentiment announced by the Individual Investor Association is still at an unusually high level, and some leading stocks are still solid, with their fall shrinking after a decline.

Meanwhile, the fact that Fed Chairman Powell is set to hold a congressional hearing also stimulates the wait-and-see attitude. On March 1, the Fed said in a monetary policy report to Congress that inflation is still high but is falling broadly. It announced that labor demand is easing in several sectors, although the job market remains tight. He said the economy is burdened by solid consumption and the housing market is improving, but the real business fixed investment rate is slowing. In general, it is not much different from what was said at the January FOMC. Given this, market participants focused more on lawmakers' questions about Fed Chairman Powell

* Features: Technology stocks slump Vs. retail distribution sector strong

Apple (-2.84%) fell on news of a 24 percent drop in iPhone sales in China since the beginning of the year. Huawei's smartphone sales in China rose 64 percent year-on-year during the same period, replacing them. Apple's weak iPhone sales triggered sluggishness in Apple parts and components stocks such as Broadcom (-4.24%), Quavo (-5.76 percent), Skywalk (-4.36 percent), Qualcomm (-3.07%) and Analog Devices (-2.50 percent). Meanwhile, Apple announced Monday its M3-chip-based MacBook Air, highlighting that it is up to 60 percent faster than existing M1-chip laptops and up to 13 times faster than Intel (-5.37%) chips-based MacBook Air, but its impact is limited. Rather, Intel seems to be expanding its decline. Tesla (-3.93%) also fell sharply on the previous day due to lower car sales in China, and further fell on news of production interruptions due to a fire at a high-voltage transmission tower near a German factory.

AMD (-0.11%) fell on news that it needs to secure special licenses for some AI processors in China. In addition to the recent influx of profit-taking in the AI industry, the move to compress stocks has also expanded. Nvidia (+0.86%) fell on dividend and profit-taking, but eventually turned upwards due to the influx of expectations for GTC and others. Other super microcomputer (+1.53%) also turned upwards. Shares related to Marvell Tech (-0.78%, Palantir (-0.96%, UiPass (-5.24%), C3.AI (-8.25%), Salesforce (-5.05%), Intuit (-4.29%), Adobe (-4.07%, ServiceNow (-4.63%) and other software sectors also fell. Cybersecurity companies such as Palo Alto (-2.78%), Zscaler (-3.67%), Fortinet (-3.29%) and CloudStrike (-5.18%) also fell, but cybersecurity companies such as CloudStrike are jumping 16% after-hours after-market and cybersecurity companies are also up around 2% after-hours

Major technologies such as MS (-2.96%), Alphabet (-0.31%), Meta Platforms (-1.60%), and Amazon (-1.95%) also fell as the desire to realize profits increased due to weakening AI-related trends. Novonodisk (-2.58%), a diabetes treatment, reported a 24 percent reduction in the risk of kidney disease in diabetics, but the decline was due to weak results from market expectations. The results showed a surge in kidney dialysis service companies such as Davita (+7.09 percent) and Fresenius Medical (+11.19 percent). Meanwhile, Eli Lilly (-1.85%), which had been on the rise due to obesity treatment, also fell along with Novonodisk due to the sale of profit-taking.

Retailer Target (+12.02%) reported a 4.4% year-on-year decline in revenue, but profit jumped more than 60% as a result of improved gross margins. Of course, the continuity is not so great due to the impact of one-off factors, but it surged when the CEO announced he would focus on making it a growth company. This led to strength in other retail retailers such as Walmart (+1.25%), Costco (+0.10%), and Dollar General (+4.32%). Large banking stocks such as JPMorgan (+1.00%), BOA (+0.68%), Wells Fargo (+1.42%) and regional banks such as Comerica (+3.77%) and Western Alliance Bancorp (+7.24%) rose amid expectations of easing unrealized losses due to falling interest rates. UnitedHealth (-1.81%) fell on news that the Justice Department has launched an antitrust investigation.

* Figures related to Korean stock markets

The MSCI Korea Index ETF fell 1.97%, while the MSCI Emerging Index ETF fell 0.89%. The Philadelphia Semiconductor Index fell 2.05%,
The Russell 2000 index fell 0.99%, and the Dow transport index also fell 1.04%. Night futures fell 0.96%. NDF dollar/won exchange rate affecting dollar/won exchange rate closed at 1,334.50 won the previous day at 1,334.00 won

* FICC: Wheat prices plunge on news of increased exports to Russia, Ukraine

International oil prices fell even though the Chinese government set a growth forecast of around 5% for 2024, stimulating expectations for increased demand. On top of that, there were news of OPEC+ countries extending production cuts, but the impact was limited. This can be seen as reflecting much of this already, and the continued expansion of U.S. crude oil production has limited oil prices. Natural gas rose on expectations of a decrease in supply as companies cut production. European natural gas also rose on news of Ukraine's restrictions on Russian natural gas.

The dollar weakened against other exchange rates due to sluggish economic indicators, but as the decline in major indexes widened, the preference for safe assets was highlighted and the weakness was reduced. However, ahead of Fed Chairman Powell's congressional hearing and the announcement of the employment report, the direction is not clear and it has only fluctuated. The offshore yuan weakened slightly against the dollar, but the exchange rate of commodities such as the Canadian dollar and Brazilian real weakened against the dollar. Other emerging exchange rates are mixed

Interest rates on government bonds fell as the ISM service industry index fell less than expected. In particular, the decline in interest rates was significant in that the employment index plunged 2.5p and the price index plunged 5.4p, suggesting a drop in U.S. employment and prices. CME's FEDwatch, after the indicator was released, showed a slight increase in the probability of a rate cut in May from 20.5% to 23.6%, and the probability of a June cut is now estimated at 69.8% from 56.9% a week ago

Gold and nonferrous metals were mixed by category, copper and aluminum fell on the back of disappointment that the Chinese government did not mention a clear economic stimulus plan at the opening ceremony of NPC despite news of a drop in inventories. Other tin and zinc rose on news of a drop in inventories. Wheat fell sharply on news that Russia's wheat export rose 7.4 percent in January and Ukraine's grain export rose 11.5 percent year-on-year in February. Corn and soybeans also fell.